Sunday, July 27, 2008

South Africa - telecoms for the masses

THE telecommunications sector is becoming a new gold rush where large white-owned companies pocket the wealth and leave nothing for the masses, says the chairman of the Independent Communications Authority of SA (Icasa).

The lowest rungs of society would be alienated if the regulator did not actively demand a greater role for black people in the industry, said chairman Paris Mashile. That is why Icasa would insist new licences for scarce spectrum went to companies that were 51% black-owned.

Speaking during a conference staged by Internet Solutions this week, Mashile defended Icasa's decision to make empowerment a more important criterion than skills or cash to build a telecoms network,

Demanding 51% black ownership "isn't outside the law" and the aim was to empower black people to start their own businesses rather than just take a stake in a successful white operator. White firms that sold equity to black people without relinquishing control were merely performing "empowerment gimmicks", he said.

The high black profile is a condition for six new licences to use a high-speed wireless technology called WiMax, and each licence will allocate 20MHz of spectrum. That decision has also angered the industry, with many voice and data carriers saying 30MHz is needed to build a cost-effective network.

Telkom's chief technical officer Thami Msimango said giving licences to one-man shows would not benefit the country. "People who can afford to roll out infrastructure should be given that spectrum," he said.

Vodacom CEO Alan Knott-Craig said true empowerment would be achieved by giving everyone access to affordable telephony and internet services, not by favouring operators owned by the previously disadvantaged. Vodacom could extend its network for two-thirds of the current cost if it had more spectrum, and it would pass the savings on to consumers by cutting the cost of calls, he said.

Mashile said there were ways of using 20MHz of spectrum efficiently, and operators just wanted as much as they could get simply to deprive other companies of that resource.

The unwelcome licensing criteria were set out after Icasa distilled a wide range of comments from the industry. It has repeatedly said the conditions are final, but has called for another round of comments.

Mashile said he would be happy to see companies build their own network infrastructure, as long as they were aware of the risks. " We will open up for whoever wants to burn his money in this market - it's up to them to take on the big guys and live with the consequences."